PAKISTAN Business Council (PBC) has done well by presenting comprehensive but realistic proposals aimed at reducing burden on existing tax-payers, rationalizing tax rate to stem brain-drain, promoting digital payments, reviving manufacturing, agriculture and services sectors and facilitating ‘Make-in-Pakistan’ theme. It has divided its budgetary proposals into five sections including broadening the tax base and providing a level playing field for domestic manufacturing, promoting industrialization, growth and job creation, consolidation of businesses to improve competitiveness, reducing the cost of doing business and helping Pakistan meet its commitments to the UN for achieving the sustainable development goals and meeting the challenges of climate change.
It is customary on the part of different bodies representing various stakeholders to give their input for preparation of the budgetary proposals but the work done by the PBC needs appreciation as it is in line with overall national thinking and, therefore, needs to be considered seriously by the Finance Ministry and others responsible for the grand annual exercise. This is what the government leaders including the Prime Minister and the Finance Minister have been emphasizing on different occasions and the support of the PBC augments efforts of the government to realize these cherished objectives. The PBC has wholeheartedly backed the idea of expanding the tax-net as a narrow taxpayer base is leading to a greater pressure on the existing taxpayers. It acknowledged the fact that the Federal Board of Revenue (FBR) had got access to financial data in various forms including the monthly statements submitted by the withholding tax collecting agents. Information from the National Database and Registration Authority, Federal Investigation Agency, Bureau of Immigration and Overseas Employment is also available. In addition, it has collected data of the tax paid by the non-filers on vehicles, immovable property and capital gains made in the stock market but no worthwhile effort has been made to use this data to encourage documentation of the economy. It seems instead of moving towards the oft-repeated objective of documentation of the economy, the government is using the data only as a revenue measure with no effort to use it for long-term purposes despite the fact these transactions give a clear idea about financial worth of the citizens concerned.
Therefore, the proposal to reduce the advance tax on filers and significantly increase it for non-filers deserves to be implemented in letter and spirit. The PBC has also made valuable suggestions to promote the theme of ‘Make-in Pakistan’ identifying three platforms: make more/make better, grow more/grow better and serve more/serve better for generating jobs, promoting value-added exports and reducing reliance on unnecessary imports. It has rightly been pointed out that Pakistan is de-industrializing at a rapid pace and it is slowly turning into a “nation of traders”, primarily due to the faulty policies pursued by successive governments, which favour imports over domestic manufacturing. The slogan of rapid industrialization was also adopted by the PTI Government but no worthwhile progress was made towards that end. There are reasons to believe that strong lobbies and import mafias are minting money at the expense of long-term growth, stability and prosperity of the country. The country has a potential to join the ranks of advanced nations as it has intelligent and hard working manpower, fertile land, an extensive irrigation network and a strategic location but vested interests are not allowing this potential to tap. Auto sector is the living example of our apathy towards the goal of ‘Make-in Pakistan’ as almost all companies flouted their contractual obligations regarding local production of parts and prefer imports due to weak monitoring and accountability. The emphasis of the PBC on food security, reducing import reliance, realizing the export potential and promoting rural prosperity through right policies to enhance the agricultural yields needs to get priority attention. There is also a considerable unrealized potential of the services sector, for both exports and domestic productivity. We hope the government will make a serious beginning in the forthcoming federal and provincial budgets to promote agriculture, exports, IT and, above all, local manufacturing as part of a long-term solution of the country’s economic woes.
